Break the Rules to Produce Radical Innovations

How often do you hear leaders using sport as an analogy for their business? Sport has great attributes in terms of endeavor, teamwork and training, but it is a poor metaphor for business in one important respect – innovation. In sport there are strict rules that cannot be broken without penalty, whereas in business most of the rules can be broken. Radical innovation means contradicting convention and inventing an entirely new game.

Redefine the Market

You can gain a remarkable advantage if you can find a way to rewrite the rules of the game so that it suits you rather than your competitors. In the late 1970s the Swiss watch industry suffered from fierce competition from the Japanese. Major brands like Omega, Longines and Tissot were in trouble. Nicholas Hayek took dramatic action by merging two of the largest Swiss watch manufacturers – ASUAG and SSIH – to form a new company, Swatch. Swatch took a radically different approach to watch design by creating low-cost, high-tech, artistic and emotional watches. Within five years the new company was the largest watch-maker in the world having rewritten the rules of the watch industry. Swiss watches historically competed against mass produced brands by focusing on tradition and quality, but Swatch changed the parameters by making watches that were fun, fashionable and collectible.

Adopt a Newcomer’s Point of View

Every business operates in an environment of written and unwritten rules. Many of these boundaries and restrictions are self-imposed and accepted without questioning. Often it is the newcomer to an industry who can ask the question, “What would happen if we broke the rules?”

This is what Richard Branson did when he launched Virgin Atlantic to take on the might of British Airways, American Airlines and Pan Am. The airlines all played by the same rules; first class passengers enjoyed the best service, business passengers received adequate service and economy passengers got few frills. Branson eliminated first class and instead gave first-class service to business passengers. Virgin Atlantic introduced innovations such as videos in headrests and limousine service to the airport.

Value Through Innovation

The law of the land has to be obeyed but most business rules are there to be broken. In sports the referee may penalize you, but in business the marketplace is the referee and it will reward a rule-breaker who creates value through innovation. Anita Roddick, founder of the retail chain the Body Shop, succeeded by doing the opposite of what the industry experts proscribed. She saw that most pharmacies were stuffy places that sold toiletries, perfumes and medicinal creams in expensive packaging and pretty bottles. The Body Shop did the opposite by packaging the goods in cheap plastic bottles with plain labels, saving money and making a statement that the contents of the packages were what mattered. The Body Shop was seen as natural, spiritual and in tune with an environmentally-friendly consumer.

Oticon, the innovative Danish hearing-aid manufacturer, broke the conventions of corporate structure when it tore up its hierarchy and created what is now known as a “spaghetti organization.” People are not allocated to departments; they move from project to project. The system seems chaotic but Oticon has achieved remarkable success with it across a period of ten years.

Challenging Conventions

Another renowned rule-breaker is Benetton, which has deliberately breached the conventions of the clothing industry during the last 20 years. The company is highly innovative in its use of colors and fabrics, but it is probably most famous for its advertising campaigns featuring AIDS sufferers and war victims. The advertisements were unashamedly shocking and controversial. In a world full of bland and politically correct images Benetton stood out like a lighthouse.

Many of the rules that apply in businesses were established years ago and have endured by force of habit. A good example is the QWERTY keyboard, which is in use on all desktop computers. The original QWERTY layout of keys on the typewriter keyboard was designed in the 1870s to slow down the speed of typing because fast operators were causing typewriter keys to jam together. By putting the most commonly used letters (e, a, i and o) away from typists’ index fingers, speed was reduced and jams were avoided. Those mechanical jams are long gone but we are stuck with a rule for a keyboard layout that is outdated and inappropriate. How many of the rules in your organization are QWERTY standards – set up for circumstances that no longer apply today?

Conclusion

To achieve radical innovation you have to challenge all the assumptions that govern how things should look in your environment. Business is not a sport with well-defined rules and referees; it is art. It is rife with opportunity for the lateral thinker who can create new ways to provide the goods and services that customers want.